Burger King Set To Go Public Again After Justice Holdings' $1.4 Bln Deal

4/4/2012 12:13 AM ET

Privately-held fast food restaurant operator Burger King Worldwide Holdings, Inc. is set to return to the public market soon. Private-equity firm 3G Capital, owner of Burger King, agreed Tuesday to sell a 29 percent stake in it to U.K.-based investment vehicle Justice Holdings Ltd. (JUSH.L) for about $1.4 billion in cash.

Justice Holdings is a vehicle founded by billionaire investor Nicolas Berggruen, Pershing Square Capital Management founder Bill Ackman and Jarden Corp. (JAH: Quote) Executive Chairman Martin Franklin. It was formed last year with the goal of buying a company with an enterprise value of between $5 billion and $10 billion by February 2014.

Following the closure of the deal, 3G Capital will continue as a major shareholder by retaining a 71 percent stake in the combined entity to be called Burger King Worldwide, Inc. The companies noted that Burger King's long-term strategy and its entire senior management team will remain unchanged.

As part of the deal, Franklin and Alan Parker, one of Justice's independent directors, will join the board of directors, along with all existing Burger King board members.

Meanwhile, the shares of Justice Holdings, which listed on the London Stock Exchange in February, will be suspended from trading on the LSE and the combined entity will list and begin trading on the New York Stock Exchange. Burger King previously traded on the NYSE under the ticker symbol 'BKC.'

The deal has the unanimous approval of the boards of directors of both companies, and is not subject to shareholder approvals. The deal is expected to close and the shares listed on the NYSE over the next two to three months. In preparation for the closing, Justice Holdings has converted its liquid assets from pounds sterling into U.S. dollars.

Founded in 1954, Miami, Florida-based Burger King is the second largest fast food hamburger chain in the world after McDonald's Corp. (MCD). It operates more than 12,500 restaurants in the U.S. and in 81 countries.

The burger chain will be listing in the public market again after it was taken private by New York-based investment fund 3G Capital in October 2010, when it acquired Burger King for $24.00 per share in cash, or a $4.0 billion leveraged deal.

A group led by private-equity firms Texas Pacific Group, Bain Capital Partners, and Goldman Sachs Capital Partners initially took Burger King public in 2006. The group acquired the company in 2002 from Diageo Plc. (DEO, DEG.L) for $1.5 billion and moved its ownership back to the U.S.

Earlier, Grand Metropolitan PLC, the then owner of Burger King, merged with Guinness & Co. to form Diageo PLC in 1997 to move Burger King ownership from the U.S. to Europe. In 1967, Pillsbury Co. bought Burger King for $18 million and began the rapid expansion across the U.S., and expanded across Europe after Pillsbury was acquired by Grand Metropolitan PLC in 1989 for $5.79 billion.